Introduction
It is a great pleasure to be able to give this Fabian Lecture
on housing and life chances today.
For the early Fabians, over
a hundred years ago, housing was a fundamental part of their vision
of social reform. Pamphlets lamented the state of the nation’s
housing and its links to poverty and disadvantage. In 1917 Sydney
Webb was one of the signatories to the pamphlet calling for a million
new homes: “homes fit for heroes.”
Yet when the Fabian Life Chances
Commission conducted its important and impressive analysis of life
chances and child poverty in Britain last year, housing got barely
a mention. Housing doesn’t get much coverage as a news or
policy item in the national media. Instead it is usually confined
to the property and lifestyle supplements and programmes.
We should not underestimate
the significance and importance of housing to Britain’s future.
Our homes affect our health, our wealth, our opportunities for happiness
and prosperity. Our homes are our nests where we nurture our young,
our shelter in storms, the building blocks of our communities. And
for most of us they are the biggest investment we will ever make,
the biggest asset we will ever own.
Over the last ten years, we
have made substantial progress in several important areas of housing
policy. That in part has prevented housing being the hot topic of
national debate. But we have also seen serious rising pressures
that have to be addressed – particularly around the supply
of housing.
The housing decisions we take
over the next few years will be critical to the life chances of
the next generation. If we ignore those rising pressures for more
homes – as some would have us do – we will see rising
wealth inequality, constraints on aspirations and difficulties for
our economy as well. And unless we do more to improve housing for
growing children, we will be denying too many of them a good start
in life.
Gordon Brown has already made
clear that housing will be one of his personal priorities as part
of his election campaign and his premiership. He is right to make
it so. Building more affordable homes, building more sustainable
homes, and improving the quality of our housing are critical to
Britain’s future.
Progress so far
In 1997, Labour faced three major immediate housing challenges.
First building confidence and stability after the recession and
negative equity of the early nineties, to help more people become
home owners. Second, dealing with the dreadful backlog of repairs
and maintenance in social housing which meant more than 2 million
families lived in homes which failed proper decency standards, around
1.5 million families lived in homes too cold for winter. Third,
addressing the travesty of people literally with no roof over their
heads, sleeping rough on Britain’s streets.
In each of these areas the Labour
government over ten years has had substantial success, and it is
that success which I believe has stopped housing being headline
news in the way that it was for previous generations.
Economic stability has helped
us avoid the 15% mortgage rates of the early nineties and helped
1.8 million more families become home owners over the last decade.
We have seen ten years of economic growth and rising prosperity,
which has helped people sustain their mortgage payments and has
increased aspirations too.
Billions of pounds of investment
in the decent homes programme has helped install central heating,
insulation, kitchens and bathrooms to deal with the shocking state
of council housing we inherited in 1997. Over 770,000 homes have
had new central heating as a result, because of a Labour government.
Over a million children have
been lifted out of bad housing as a result since 1997. And it matters.
Damp homes increase the chances children will suffer from asthma
or poor health. Cold homes increase the chances pensioners will
suffer winter chills or an early death. Delivering decent homes
for those on low incomes was rightly a major priority for the Labour
government in 1997.
Action on homelessness has been
successful too. Government backed local initiatives have helped
thousands of people off the streets, and thousands more avoid homelessness
or long term bed and breakfast accommodation.
Rough sleeping has dropped by
two thirds, with new investment in hostels not just to give people
shelter for the night but to help them back on their feet and into
homes of their own. Families no longer get stuck in long term bed
and breakfast accommodation and investment in prevention means that
cases of homelessness are at a record 23 year low. So on the 40th
anniversary of 'Cathy Come Home' last year, experts from other countries
came to learn from what Britain had achieved in bringing homelessness
down.
In each of those areas where
housing could have become a national crisis, we have instead seen
substantial and successful change.
Progress too has been made in
regenerating town and city centres, and delivering an urban renaissance.
Planning changes and strategic public sector investment have helped
revive declining housing markets and redevelop areas once left to
decline. People are moving back into town and city centres. Thousands
of hectares of derelict land have been brought back into use as
the proportion of homes built on brownfield land has increased from
56% in 1997 to over 70% today. Major investment programmes are triggering
growth in the Thames Gateway as well as in the housing market pathfinders
in the Midlands and the North. Communities which had once been abandoned
are seeing new investment and prosperity as a result. The quality
of urban design is now being championed in councils and development
projects across the country – to the great benefit of local
people.
The need for more homes:
housing and inequality
But alongside that progress we have also seen growing pressures
– in particular around the need for more homes – which
will cause widening inequalities in future if we don’t respond.
Last year over 180,000 additional
homes were supplied in England – up from 130,000 four years
ago. However, we have an ageing, growing population, with more people
living alone, and an average of 220,000 new households a year are
expected over the next twenty years.
Every region is seeing growing
housing pressures. Of course, there are always cyclical pressures
in the housing market, which the Bank of England monitors. But in
addition to these cyclical changes Kate Barker pointed out that
long-term house prices have risen faster than earnings, and faster
than in other countries too. Unless we do more to close the gap
between rising demand and increased supply we will see long term
house prices continue to grow – at the expense of first-time
buyers and those waiting for a council house or social home of their
own.
I believe this challenge is
now growing in urgency. Unless we do more to respond to the housing
needs we face for the future we will see growing numbers of children
denied opportunities, growing numbers of families facing serious
housing pressures, and widening wealth inequality in our society.
Government analysis found that
if were to carry on building at previous rates then over the next
twenty years we would see the number of thirty-year-old couples
able to afford to buy a home drop from over 50% today to nearer
30%. That is unfair and unsustainable. Over 80% of 45-60 year olds
are home owners. But their children will find it much harder to
follow in their footsteps unless we build more homes.
Already first time buyers are
facing real pressures. Almost half now rely on the 'Bank of Mum
and Dad', or other family favours to help them get onto the ladder.
But what about those who don’t have parents and grandparents
who can help them out?
Over the last century the housing
market and widening home ownership has helped narrow wealth inequalities
between those on middle incomes compared to the very well off. In
1918 only 23% of the population owned property, and wealth was concentrated
in the hands of a very small minority. By 2005 71% of the population
were home owners. However, rising house prices have meant those
outside the housing market have been left further behind.
And over the next century, unless
we address the long-term shortfall in housing with its impact on
long-term prices, we will see the housing market dramatically widen
wealth inequalities as those without family help to get them started
find it harder and harder to become home owners in future.
For those on the lowest incomes
the pressures are greatest. If we do not also build more social
housing and more shared ownership homes we will see growing overcrowding
and rising social housing waiting lists too. Already we have increased
the level of new social housing by 50% over the last three years,
but we have to go further. Many families with children wait for
years in overcrowded or inadequate accommodation to get a secure
home of their own.
For children growing up in poverty,
poor housing can be as devastating to their life chances as low
income. Kids won’t get the best start in life if they have
nowhere to do their home work, or if teenagers stay out each night
because they have no space at home to call their own.
Since 1997 the most substantial
progress in lifting children out of poor housing has come through
improving the quality of existing homes. The decent homes programme
and other housing changes has already cut the number of children
living in non-decent, overcrowded or inadequate housing by over
a million compared to 1997. But that still leaves too many children
needing better homes. We still need to go further to refurbish homes.
But we also need to build more new affordable family homes.
Children should not be growing
up in cold or damp housing. But nor should they be living in overcrowded
housing either. We want to increase to 2 million the number of children
helped out of bad housing by 2010, as Gordon Brown has said. Improving
children’s housing is a critical part of improving their life
chances and tackling child poverty too.
Lessons from History
The housing challenges we face may seem daunting. However, previous
generations faced even greater housing challenges and often found
radical ways to respond. Sometimes they made dreadful mistakes.
Sometimes they left enduring legacies in beautiful homes and streets
we still enjoy today. But the scale of their housing achievements
should teach us important lessons in the new challenges we face
today.
For the Victorians new housebuilding
was an essential part of the growth of cities and industrialisation.
Between 1830 and 1900 over 3 million homes were built, and after
the first world war, expansion was even more rapid. The built-up
area of London had expanded threefold between 1914 and 1939 and
the same happened in other cities, including new development around
Manchester, Liverpool and Leeds. Town planning began – in
the civic designs for the centres of the major northern cities,
but also in the garden cities such as Letchworth, Welwyn and Wythenshawe
in Manchester, or the garden suburbs such as Hampstead and Bedford
Park in Chiswick.
After the First World War, the
clamour for “Homes Fit For Heroes” was overwhelming.
The result was a massive expansion of predominantly private housebuilding.
Completions peaked at over 350,000 per annum in the late 1930s –
more than double the level of house building we have seen in recent
years. This made housing affordable to more people than ever before.
By the end of the Second World
War, housing was top of the agenda once more - opinion polls in
1945 showed that 41% said housing was their number one priority
housing.
The post war consensus sustained
another big increase in housing, but this time combined with new
strong protection for the environment.
The Abercrombie Plan in 1944
which set out proposals for new towns close to London, but also
for a Green Belt to protect the countryside and ensure the growing
population could still reach green space. The New Towns Act of 1946,
which made it possible to deliver 700,000 new homes over forty years
in 28 new settlements and towns across the country. And the sixty-year-old
Town and Country Planning Act set out new ways to protect the country
from the urban sprawl made possible by car ownership and to promote
properly designed and planned development.
In the 1964 election, Labour,
Conservatives and Liberals all fought on the same housing promise:
to build 300,000 new homes a year. It seems hard to imagine, given
the hostility many on the Conservative benches have shown towards
150,000 new homes a year, that Harold MacMillan could see it as
such a triumph to build a million homes just forty years ago.
By the mid sixties population
growth was again rising sharply and it was clear that existing plans
could not cope. A new generation of New Towns were created at Milton
Keynes, Peterborough, Telford, Warrington and Northampton. Every
town and city built new estates and urban extensions.
However, the rush for housing
growth in the sixties also sowed some of the problems we are still
reaping forty years on. Mistakes such as the sixties tower blocks
and the segregated estates of social and private housing are still
troubling communities today. And they damaged public confidence
in the planning system and in new housing development. Difficulties
in renewing the post-war generation of New Towns made their grand
visions appear dated and inflexible, unable to appeal to changing
needs. Attlee’s Housing Minister Nye Bevan, found his dream
of the “tapestry of a mixed community” where “the
doctor, the grocer, the butcher and farm labourer all lived in the
same street” hard to achieve.
By the eighties, under the Conservatives,
housing policy had become strongly market-led. Developers concentrated
on sprawling executive estates on the edge of towns and cities often
without infrastructure, social facilities or good design creating
a backlash against new development that still runs deep. Housing
policy supported the right to buy council homes, which rightly helped
families access wealth for the first time. However, it ignored the
quality of housing for those left behind in the social sector, and
the needs of the most vulnerable. And, as interest rates rose to
15 per cent and inflation to nearly 10 per cent, 1.5 million households
suffered negative equity and 250,000 families had their homes repossessed
between 1990 and 1993 alone.
At the same time the focus on
urban expansion and greenfield development led to declining town
and city centres, provoking the anxieties both of the countryside
conservationists and the urban regenerators.
Where do we go from
here
The challenge for us now is to learn the lessons from past housing
policies, as we face today's new problems.
In many respects the challenges
are very similar. Just as in previous generations we need a substantial
increase in the level of housing. However the scale of building
we have proposed – at 200,000 new homes a year – remains
modest compared to what our predecessors achieved.
We face higher demand for home
ownership due to rising aspirations, but also a growing need for
more supported homes for those on low income. We face similar challenges
to improve the quality of housing as well as the quantity. And the
experience in recent years with brownfield development and urban
renaissance has in many areas produced communities which should
be more sustainable than the developments of previous generations.
But we need to go further now
to support the affordable homes and quality developments we need.
Changes to the planning rules we introduced this April give local
councils greater responsibility to identify more good sites for
new homes. But it also gives them more flexibility to insist on
family housing, to require more affordable housing and to demand
higher design standards – including green spaces, gardens
and play areas as well.
Local councils in every region
need to do more to identify good sites for more homes. 40 towns
and cities across the country have come forward to propose significant
housing increases in their area, on top of the developments in the
Thames Gateway and other growth areas such as Milton Keynes. But
more will still be needed. Councils need to do more to bring forward
brownfield land. And they need to seek the most sustainable locations
for development – including considering new towns as well
as urban regeneration and extensions too.
Gordon Brown has made clear
that social housing will be a priority for the spending review too.
We need to go further than the 50% increase we have seen in recent
years. But that means we also need to look at new ways of financing
additional homes. And we need more shared ownership too in order
to wider access the wealth and help people get their first steps
on the housing ladder.
We want to see the private sector
do more – developing the market in equity loans to help first-time
buyers take the first step onto the housing ladder, building more
affordable housing and contributing through planning gain.
We want to see more done by
Housing Associations to get better use of their assets – including
those who currently hold extensive assets but are not using them
to build. We would like to see them doing more – perhaps in
partnership with other Housing Associations and Local Authorities.
I believe councils have a stronger
role to play. The current system penalises councils for building
homes by redistributing some of the rents from those homes across
the country. From next April we will change the rules so that councils
building through Arm's Length Management Organisations or Special
Purpose Vehicles can keep the rents of the new homes they build,
and make it easier for them to build new homes to rent and buy on
council owned land. We need to look at new ways of financing this
– including community land trusts, co-operative models, as
well as new ways for first time buyers or those in private rented
homes and social housing to save and build up property assets too.
Of course homes require infrastructure
investment too. Already we have put billions into infrastructure
to support, new homes especially in the Thames Gateway and growth
areas. But more will be needed, which is why we are looking at new
ways to finance that too.
New Challenges
But we also face two important new challenges compared to previous
generations. The first is from climate change. The second is from
the extent of political opposition that remains to new homes.
Our homes account for 27% of
the nation’s carbon emissions. The homes we have yet to build
will account for a third of our housing stock by 2050. That is why
we need to make sure we use new developments to promote higher environmental
standards and to cut carbon emissions too. We have already set out
a timetable to cut carbon emissions from housing so that all new
homes are zero carbon by 2016. But we need new approaches and ideas
to increase housing and raise environmental standards at the same
time.
After the war, the Labour government
led a nationwide consensus in support of new housing and greater
environmental protection too. The New Towns were built alongside
the introduction of strong planning controls and the Green Belt.
Sixty years ago, the post-war generation recognised the importance
of promoting economic and housing growth and protecting the environment
at the same time.
We need to do the same again.
Like the post-war generation we need to set out a clear and radical
programme to increase housing and to protect the environment at
the same time. That means developing ambitious new ideas, like Gordon
Brown’s support for five new eco-towns combining the affordable
homes we desperately need in truly sustainable developments. Offices,
shops, schools and local transport should be designed to cut carbon
emissions too. We want to see local councils now coming forward
with proposals for eco-towns, looking particularly at old brownfield
and public sector land which could be used.
And at the same time we are
looking at ways to increase standards in major regeneration developments
in the Thames Gateway. These new developments could set the standards
and help develop the technologies to cut carbon emissions across
the country and even across the world.
Given the housing pressures
on first-time buyers and young families, there should be strong
support now across the country for the new homes and the higher
environmental standards we need.
After all, in previous generations
there was a strong consensus across the political divide on the
need to build the 300,000 homes the nation needed.
Today, the Labour government’s
commitment to build 200,000 new homes a year has become a significant
political dividing line. The Tories have repeatedly refused to support
these additional homes. Tory Communities Minister Caroline Spelman
said, “we need more homes, but not on the scale Kate Barker
recommends” and countless Tory MPs (including Shadow Housing
Minister Michael Gove) have signed parliamentary motions or called
debates opposing increased housing in their areas.
Across the regions the Conservatives
are opposing increased housing too. In the South East, the Conservative-controlled
Regional Assembly are actually arguing for cuts in the level of
housebuilding compared to their plans from six years ago.
And it matters. The Regional
Assemblies and local councils play an important part in the planning
process. The fastest way to increase housebuilding in this country
would be for Regional Assemblies and local councils to swiftly identify
more appropriate sites for homes.
In London and the South East,
first-time buyers are being let down by the strong opposition of
the Conservative South East Regional Assembly and Conservative Councils
to increased housing in their areas.
David Cameron says he wants
to help first-time buyers. Yet his party at national, regional and
local level are still opposing the increased homes that first time
buyers need. If the Conservative leader was serious about housing
he would call on the South East Regional Assembly to drop their
campaign for cuts in homes. Instead he is doing nothing to persuade
his own party at regional or local level to deliver the homes we
need
Either this is a shocking lack
of leadership on a serious problem facing Britain. Or it is another
example of the Tory leader saying one thing, but doing another,
and letting British families down.
The Labour government has made
clear its commitment to building more homes at higher standards.
We are calling on local councils all to do more to support the extra
homes Britain needs. Gordon Brown has made clear his strong commitment
to improving housing in this country. But we need the local partnerships
in every region, every city and every community to deliver the homes
for the future which we need.
Conclusion
I believe that building more and better homes for our children must
be one of the main priorities now for the Labour government looking
forward to the next ten years. But it must also be a priority for
local government and for communities in every region.
We need to learn lessons from
previous generations - from their mistakes as well as their successes.
But if we don’t give housing the same priority that previous
generations did, the consequences in terms of inequality, and denied
opportunities for our children will be severe. This is our chance
to build truly sustainable futures for the next generation.
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